E-MARKETING

E-marketing is a process of planning and executing the
conception, distribution, promotion, and pricing of products
and services in a computerized, networked environment,
such as the Internet and the World Wide Web, to
facilitate exchanges and satisfy customer demands. It has
two distinct advantages over traditional marketing. Emarketing
provides customers with more convenience and
more competitive prices, and it enables businesses to
reduce operational costs.
As businesses offer e-marketing and online shopping,
customers can get market information from their computers
or cell phones and buy goods or find services without
leaving home twenty-four hours a day and seven days a
week (24/7). They can read ads on the Web or from email,
get e-coupons, view pictures of goods, compare
prices, and make purchases with a few clicks of their
mouse, saving the time and money it would take to shop
in person at a brick-and-mortar store. At the same time, ebusinesses
can reduce costs in distribution channels and
physical store space and thus pass the savings on to customers.
To make e-marketing effective and efficient, managers
of e-businesses need to know online customer
behavior, e-marketing techniques, costs and benefits of emarketing
over traditional marketing, and pitfalls and
legal issues of e-marketing. A discussion of each of these
aspects follows.
ONLINE CUSTOMER BEHAVIOR
In the late 1990s online shoppers were mainly welleducated,
high-earning, twenty- to forty-year-olds. By
2003 online shoppers represented a broader demographic,
with an average age of forty-four years and an average
annual household income of $65,000. Of these shoppers,
50 percent were female and 50 percent were college graduates.
According to a 2004 report from the U.S. Department
of Commerce, in 2003 searching for product/service
information was the second most popular online activity
after e-mailing or instant messaging and 77 percent of
U.S. Internet users age fifteen and older shopped online.
E-customers researched products and services that they
were considering for purchase online. Their final purchases,
however, may not have been made online.
Several reasons are behind the reluctance to purchase
online. Studies published in 2003 and 2004 reported that
25 percent of e-commerce sites do not display a phone
number clearly on the customer service page; 49 percent
of online shoppers could not readily find the answers to a
question; and 88 percent of shoppers abandoned their
online shopping carts before reaching the checkout. The
Yankee Group, a Boston-based research firm, indicated

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 235
E-Marketing
that up to the first quarter of 2003, the average conversion
rate from shopping in brick-and-mortar stores to buying
on e-commerce sites was just 10 percent.
E-customers’ most serious concern is security and privacy,
followed by price, delivery cost, return policy, customer
service, site design, navigation, one-click shopping,
and personalization. E-marketers must assure customers
that their sites use cybercrime-proof systems to protect ecustomer
information and clearly display the security/privacy
statement on their sites. Competitive prices,
discounts, e-coupons, free delivery, and standard return
policies motivate initial online purchases and repeat purchases.
Nevertheless, requiring too many mouse clicks for
navigating on a site, a lack of easily accessible help, technical
difficulties, and requesting too much customer
information for purchasing goods often causes shoppers
to abandon their online shopping carts before reaching
the checkout.
E-MARKETING TECHNIQUES
E-marketing techniques can be broken down to pull and
push marketing. Pull marketing is a passive technique by
which online shoppers take the initiative requesting specific
information on the Web. Search engines,
product/service advertising, e-coupons, and e-samples are
part of pull marketing. For example, e-marketers can register
their e-commerce sites, products, and services with
search engines such as Google and or Yahoo, thereby
enabling online shoppers to search for product/service
information using Google or Yahoo and link to their sites.
Similarly, e-marketers can also register their e-coupons
and e-samples with e-coupon sites such as ecoupons.com
and e-sample sites such as yes-its-free.com.
Push marketing is a proactive technique that enables
e-marketers to “push” their product/service information
to Web visitors or shoppers without their requesting it.
Banner advertising, pop-up advertising, e-mail promotion,
and spamming belong to push marketing. For
instance, e-marketers can rent designated space from
Internet service providers such as America Online or
MSN for their banner or pop-up ads. Using animated
graphics, appealing messages, and links, e-marketers try to
lure visitors to their sites to buy their products or services.
Many Internet users, however, find such ads annoying and
employ software that blocks pop-ups and banner ads.
E-mail promotion is widely used by e-marketers to
send new product/service information to their registered
customers. For example, airline companies periodically email
their registered customers about their e-fares and
promotional vacation packages. Spamming refers to sending
millions of e-mail promotions to recipients who have
never asked for the information. These recipients’ e-mail
addresses are often purchased or swapped with other businesses.
Spamming is at best unethical and at worst illegal.
COSTS AND BENEFITS OF
E-MARKETING
E-marketing can offer more competitive prices than traditional
marketing because e-marketing reduces costs by not
having to maintain physical store space and by strategically
placing distribution centers throughout the country.
Second, because the Internet is available 24/7, e-marketing
enables shoppers to search for product/service information
and buy goods at their convenience, not just when
the store is open. Third, research indicates that the cost of
Internet-based promotion is one-fourth of traditional promotion,
because it does not incur the costs of paper, printing,
handling, and mailing. Fourth, e-marketing enables
buyers to custom-build products such as shoes, clothes,
computers, and automobiles on the Web, options often
not available in stores.
PITFALLS AND LEGAL ISSUES
Failures and successes in e-marketing have shown that
when marketing goods online results in distribution, storing,
or shipping and handling costs higher than the value
of the goods, an exclusively online enterprise may be
headed for a short life. In addition, e-marketers need to be
aware of cultural pitfalls when designing e-commerce sites
for foreign markets.
E-marketers must operate their businesses in compliance
with numerous laws. For example, e-marketers are
responsible for protecting customers’ privacy; without
customers’ permission, they are not legally allowed to
share or sell customers’ information to a third party.
Copying other businesses’ Web information for commercial
use is also in violation of copyright law.